The Polarizing Trend of Regional CO2 Emissions in China and Its Implications

CO2 emissions are unevenly distributed both globally and regionally within nation-states. Given China’s entrance into the new stage of economic development, an updated study on the largest CO2 emitter’s domestic emission distribution is needed for effective and coordinated global CO2 mitigation planning. We discovered that domestic CO2 emissions in China are increasingly polarized for the 2007–2017 period. Specifically, the domestically exported CO2 emissions from the less developed and more polluting northwest region to the rest of China has drastically increased from 165 Mt in 2007 to 230 Mt in 2017. We attribute the polarizing trend to the simultaneous industrial upgrading of all regions and the persistent disparity in the development and emission decoupling of China’s regions. We also noted that CO2 emissions exported from China to the rest of the world has decreased by 41% from 2007 to 2017, with other developing countries filling up the vacancy. As this trend is set to intensify, we intend to send an alarm message to policy makers to devise and initiate actions and avoid the continuation of pollution migration.


■ INTRODUCTION
Anthropogenic CO 2 emissions are driven by economic activities. As a result of differentiated levels of economic development, the CO 2 emissions embodied in economic consumption, or consumption-based accounting (CBA) emissions, are distributed unequally across the globe. From the global perspective of regional economic development, CO 2 emissions have increasingly shifted from developed regions to developing regions, whose population generally earns lower incomes. 1 Recent studies confirm that CO 2 emissions have been relocating to developing regions with increasing speed. 2−4 Since the start of the new millennium, the CO 2 emissions produced by developing regions have drastically increased compared to those produced by developed regions. 5 On the other hand, some developed regions of the EU and North America have already achieved a decoupling of CO 2 emissions and economic growth. 3 However, this much-lauded decoupling has often been achieved at the expense of exploiting the emissions embodied in imports from developing regions. 6 Research shows that the emissions embodied in trade from developing regions to developed regions have increased drastically from 0.9 Gt CO 2 in 1996 to its peak of 2.1 Gt CO 2 in 2006, although they then quickly decreased to 1.5 Gt in 2016. 7,8 In addition, it is likely that poverty alleviation efforts will mean that those newly lifted out of poverty and near-poor individuals will increase their demands on energy consump-tion. 9 Thus, poverty alleviation in developing regions can inadvertently contribute to intensified CO 2 emissions. 10,11 Being the single largest CO 2 emitter, China has been studied by many for its consumption-based CO 2 emissions. As a net exporter of CO 2 emissions, 12,13 China's success at economic upgrading decreased its emissions embodied in exports from 2008 to 2015. 14 Due to its economic and geographical size, China's provinces remain varied in their levels of development. Thus, domestic trade-embodied emissions and their associated energy consumption are also considered a key research topic. 15 Recent research has identified that China's western regions are net domestic exporters of embodied CO 2 emissions to coastal eastern regions due to the differences in China's domestic economic structure and development. 16−19 Some lately published research accounts for the CO 2 CBA of China's provinces in 2017. 20,21 However, none of the referenced studies emphasize the intensifying domestic inequalities in consumption-based CO 2 emissions among China's regions, as well as the possibility of their further development. Since China entered the so-called economic "new normal" in 2012, 22 the economic and CO 2 emission structures may have undergone alterations. Economic transformation and development in China may also imply that other countries may take up the polluting roles in the coming years. Research is thus needed to characterize and understand the rationale and scale of these changes, thus formulate further policy recommendations in accordance with the widening inequalities and overseas outsourcing trend of CO 2 emissions in China.
In this study, we used the latest available Multi-Regional Input−Output (MRIO) table for 2017 to reveal the latest trend in the inequal geographical distribution of consumptionbased CO 2 emissions in China by extending the investigation beyond 2012. The results of this research show that the inequality in the geographical distribution of CO 2 emissions has intensified. Compared to previous years, CO 2 emissions are polarized toward the less developed and emissioninefficient northwest region. With referenced and original evidence and supported by economic theories, we further argue that the reason for such polarization is the result of the lagged correlation between economic development and carbon emission efficiency, creating a so-called "carbon leakage" within China. In other words, some developed regions in China have achieved emission decoupling with economic growth like many other developed countries, while the less developed parts of China are still growing their economies at the expense of increased emissions. As China grows in economic strength while setting ambitious CO 2 emission mitigation objectives, the outsourcing of China's emissions to less developed and emerging economies should be a growing concern for global collaboration on carbon mitigation, as this dynamic duplicate concerns about the decoupling and cross-border outsourcing of emission flows in other parts of the world.

■ METHODS AND MATERIALS
Consumption-Based Emissions. CBA allocates emission responsibilities to consumers. Unlike production-based accounting (PBA), where emissions are registered within territorial boundaries, CBA offers a lens to examine the emissions embodied in the upstream of products' final destinations. 23 Thus, by comparing the CBA for CO 2 emissions, consuming provinces' polluting responsibilities can be quantitatively analyzed to reveal the evolving trends in the inequalities of CO 2 emissions among Chinese provinces. It should also be noted that the CBA for CO 2 emissions mentioned in this study are all domestic CBA emissions, meaning that CBA emissions from overseas are simply removed as they are out of the scope in this study.
In CBA, calculation is based on Environmentally Extended Input−Output Analysis (EE-IOA), 24 a widely adopted extension of the classic Leontief Input−Output Model. 25 Originally, the Leontief Input−Output Model could be given by eq 1: In eq 1, X is a vertical vector that denotes the total output by sectors and regions, and Y is a vertical vector that denotes the total final consumption by sectors and regions. I is an identity matrix that has ones on its diagonal and zeros as all the other elements. A is the production coefficient matrix, which shows the technical input needed per unit output.
The environmental extension of Input−Output Model and, thus, CBA calculation require a CO 2 emission intensity horizontal vector E to be added so that we have eq 2 below: In eq 2, C is the CBA for CO 2 emissions by regions and sectors given as a horizontal vector. Ŷis the diagonalized form of Y.
Conventionally, there are two types of MRIO tables used by researchers. The noncompetitive MRIO table differentiates domestic and foreign intermediate productions as the production technical coefficients are separately given. On the other hand, competitive MRIO tables do not make such differentiation, but instead presents import from and export to other countries as separate columns. In this study, we adopt the noncompetitive MRIO table for calculations in accordance with the past studies. As the focus of this research is the domestic CO 2 emission of China, we do not consider the import from and export to countries overseas by leaving out the export and import column of the competitive MRIO table of China.
Emission Gini Coefficient. Economists often use the Gini coefficient to quantitatively compare income inequalities. 26 Recently, some researchers have altered the methodology for calculating Gini coefficients to investigate the CO 2 emission inequalities across different income groups. 27,28 Here, in this research, we further changed the variables in the Gini coefficient calculations to directly show the difference in CO 2 emissions among Chinese provinces instead of population groups. Originally, Gini coefficient is derived from the Lorenz Curve. The larger the Gini coefficient is, the more unequally the income is distributed among the population. In a Lorenz Curve, the horizontal axis is the fraction of population, while the vertical axis is the cumulative share of income. A line of equality indicates perfectly equal distribution of income among all the population. Denoting the area between the Lorenz Curve and the line of equality as A and the area between the Lorenz Curve and the axes as B, the Gini coefficient is simply given by A/(A + B). The emission Gini coefficient in this study changes the horizontal axis to the proportion of final consumption in China's provinces and the vertical axis to the cumulative consumption-based CO 2 emissions, as shown in Figure 2. Hence, the alternative version of the Gini coefficient can be calculated using eq 3 below: In eq 3, A is the area between the emission Lorenz Curve and the line of equality. B is the area between the emission Lorenz Curve and the axes. By changing the concept of the Gini coefficient into the format presented in eq 3, we intend to reveal the inequality in emissions embodied in consumption activities across Chinese provinces.
Data . The MRIO table was  In the construction of the 2017 Chinese MRIO table, we refer to the method utilized by Mi et al., 22 where the gravity model is applied to simulate interprovincial and intersectoral trade. The gravity model considers the trade between two locations to be directly proportional to the economic sizes of and inversely proportional to the distance between the two locations. Concretely, it can be expressed by eq 4: In eq 4, y i rs represents the economic quantity of item i traded from location r to location s. x i rO is the quantity of item i exported by location r. x i Os is the quantity of item i imported by location s. d rs is the distance between locations r and s. In this study, we used the distances of provincial capitals for d rs . β 1 , β 2 , and β 3 are the model coefficients to be obtained through regression. e β 0 is the error term. To reconcile for linear regression, eq 4 is manipulated into eq 5, as shown below: Having the regressed coefficients, it is thus possible to model the economic flow between any two provincial sectors. In addition to the standard gravity model, we also introduced impact coefficients to model the cooperative and competitive relationships among provincial sectors, which is given as c i gh below in eq 5: In eq 6, c i gh is the impact coefficient for item i between locations g and h for n locations, which is the number of provinces in this case. It measures the strength of interaction of item i. μ i g and μ i h are the location quotients of item i in locations g and h.
Then, the trade flow obtained from the gravity model is further modified into eq 7 to reflect cooperative and competitive relationships using impact exponents δ̅ − δ i : δ i is the proportion of the total output of item i that it uses as its own intermediate inputs, while δ̅ is its average value. Hence, the denominator of eq 7 will adjust the trade flow modeled from the standard gravity model to reflect cooperation and competition. The final MRIO table is obtained with the RAS algorithm to ensure its consistency in column and row sums 29 .

■ RESULTS
Our latest results for 2017 suggest that CO 2 emissions in China continue to be shifted toward the less developed northwest region, creating a widening inequality in consumption-based CO 2 emissions. In Figure 1 Table S1 in Supporting Information). Note that not all transregional flows are presented in this figure due to artistic constraints. Please refer to the Table S2 in Supporting Information for the comprehensive data set used to produce this figure. The unequal distribution of emissions in China can also be shown by the disparities between final consumption and consumption-based CO 2 emissions among provinces. While some developed provinces enjoy high levels of consumption, the CO 2 emissions associated with them are disproportionately lower. Figure 3 is produced to make a convenient comparison of the two quantities. In Figure 3, the provinces on the left of the unity line induced more CO 2 emissions than they consumed, and vice versa for the provinces on the right of the unity line. Observation shows that Inner Mongolia, one of the northwest provinces, is a typical province with disproportionately higher CO 2 emissions than its consumption. In Inner Mongolia, the differences between the percentages of consumption-based CO 2   differences between the percentage of final consumption and consumption-based CO 2 emissions remained at 3.3 percentage points from 2007 to 2017, but gradual increases in differences can be identified in other developed provinces, such as Beijing (0.9) and Shanghai (1.0). Moreover, increases in the disparities between the percentage of final consumption and consumption-based CO 2 emissions can be seen in many more provinces. In Figure 3, scattered dots for 2007 are located closer to the unity line compared those for 2017, meaning that the disparities were more severe in 2017 than they were ten years prior. Another indicator suggesting a widening inequality is the number of provinces with a higher proportion of consumption-based CO 2 emissions than final consumption. Provinces with a higher proportion of consumption-based CO 2 emissions than final consumption generally have higher emissions per capita. The extent of the differences in emissions per capita also intensified in 2017 compared to 2007. This again indicates a polarizing trend of consumption-based emissions toward the less developed provinces of China.
The discrepancy in consumption and consumption-based CO 2 emissions can be analyzed based on the differences in emission intensity and emissions embodied in domestic trade, as shown in Figure 4. In general, provinces with higher emission intensities exported more embodied CO 2 emissions to other provinces but caused less consumption-based CO 2 emissions in 2017. The opposite applies for provinces with lower emission intensities. In 2017, all 5 provinces with the highest CO 2 emission intensities were net exporters of embodied CO 2 emissions. However, having high emission intensities before 2017 was not equivalent to being a net exporter of embodied CO 2 emissions. Among the 5 provinces with the highest CO 2 emission intensities in 2007, 3 were net importers. Inner Mongolia is the only province with an increased CO 2 emission intensity, while it also remains the largest net exporter of embodied CO 2 Table S4 in Supporting Information for data result.  Table S3 in Supporting Information for data result. ■ UNCERTAINTY Same to any research, this study is prone to limitations and weakness. Although economic factor is fundamentally determining to consumption level and hence consumptionbased emission, there are other factors that play important roles in determining the consumption based CO 2 emissions across geographical locations. For instance, provinces in the north requires more heating in colder seasons, which may contribute to higher consumption-based CO 2 emissions as economic grows and residents' income increases. As the degree of income elasticity varies for different factors, the extent on the noneconomic factors' impact on consumption-based emissions and their inequalities may be investigated in further studies.
In addition, due to differences in specifications and data source used for MRIO table compilation, uncertainties may also arise between MRIO tables used and hence the calculated consumption-based emissions. We have performed the same calculation for consumption-based CO 2 emissions using another recently published 2017 China MRIO table compiled by CEADs. 35 Calculation with the alternative 2017 China MRIO table verifies the polarizing trend discovered in this study. For the consumption-based CO 2 emissions of the 31 provinces, the average difference is 22%. If the two outlying results are removed, the average in differences is further reduced to 14%. It suggests the results in this study are generally accurate and reliable, but further investigations may be needed to discuss the specific provinces that have larger discrepancies in the CO 2 emissions calculated.

■ DISCUSSION
In this study, we depicted the changing distribution of consumption-based CO 2 emissions among Chinese provinces from 2007 to 2017. The general trend of consumption-based CO 2 emissions flow is from inner lands to coastal regions, same as the most recent study of Dong et al. 21 has found. Being more unique and focused, our result revealed that the unequal geographical distribution of CO 2 emissions intensified. Emission responsibilities shifted toward a few provinces, which were mostly net exporters of embodied emissions to other provinces. In other words, less developed provinces are becoming the so-called "pollution haven" for the more developed provinces. In past studies, the hypothesis of a "pollution haven" has been proven with evidence at the international scale. 36,37 Our study quantitatively tells the interesting story that the domestic transfer of embodied pollution in China not only exists but has also intensified in line with global trends. On the other hand, the consumptionbased CO 2 among provinces in China also shows a polarizing trend. More and more consumption-based CO 2 emissions are now induced by the less developed regions in China, shown by the intensifying emission Gini coefficient. In the early 2000s, the coastal regions of China economically benefited from globalization and China's opening up, constituting the first batch of developed Chinese regions. One possible explanation for the observation is the Flying Geese Paradigm proposed by Akamatsu. 38 After acting as the outsourcing hub for other developed economies, the lower-end and more polluting industries of the coastal regions were phased out and moved to the less developed inland regions once industry upgrading was completed. 39,40 This can also be explained by the "carbon leakage" phenomenon widely emphasized by the policy and science communities. 41 As a region becomes more developed, the cost of pollution increases due to tightened local regulations. Businesses will seek alternative locations with laxer pollution restrictions to lower the cost of production, causing the shifting of pollution sources to the less developed regions, as revealed in this study.
Lagging in Carbon Decoupling. The transfer of pollution to less developed regions can also be linked to the U-shaped relationship between pollution and economic development. Initially, pollution continues to increase with progress in economic development. Once a region is relatively developed, pollution will start to decline after a tipping point due to increased emphasis on environmental welfare. Such a relationship has been proven in global studies. 42 The existence of a turning point in China's CO 2 emissions is also proven with Chinese historical data. 43 The decoupling of carbon emissions and economic growth in the more developed coastal regions has also been verified by Zhou el al. 44 For further analysis, CO 2 intensities against consumption per capita are plotted in Figure 5. Doing so illustrates an inverted U-shaped relationship, coinciding with Environmental Kuznets Curve (EKC) theory. Although most EKC research adopts production-based accounting, some literatures also verify that consumption-based emissions may also follow the inverted U-shaped relationship with economic development. 45,46 It is shown in Figure 5 that developed regions such as Beijing and Shanghai already exhibit a strong decoupling between final consumption and per unit emissions, but such a decoupling trend has yet to be discovered among less developed regions such as Inner Mongolia and Ningxia. Observation shows that the less developed regions of China still have great potential to improve their emission efficiencies.
An effective way to achieve CO 2 emission mitigation is to target less developed and more emission-intensive regions, a strategy that has proven to be one of the most effective for CO 2 emission mitigation. 7,47 In fact, the Central Government of China has already realized the challenges in CO 2 emission   49 In addition, our study also quantitatively shows that the increasing of CO 2 emissions embodied in the export from the northwest to other regions is a key contributor to the increasing polarization of CO 2 emissions across China. Besides focused policies on the less developed regions only, the Central Government may also consider formalized mechanism to promote coordinated cross regional policies among both developing and developed regions. For instance, Clean Development Mechanism (CDM) has always been advocated in the international setting, but less attention has been diverted for CDM with countries' borders. The Central Government may consider the implementation of similar mechanism to ensure more just allocation of emissions responsibilities among domestic players and less mitigation resource burden on the Central Government. In addition, financial tool may be an alternative for alleviating the inequality in CO 2 emissions. Regulatory easing and subsidies for green bond issuance from less developed regions to the developed regions may also be a viable option. Trends with the World. However, CO 2 emission mitigation is not only a domestic problem but also a global challenge that requires international coordination. Pollution transfer happens across borders between China and the world as well. Evidence supports our observation that the CO 2 emissions embodied in China's net exports to developed countries are already decreasing, 22 shifting to the developing world. 50 Such an observation serves as empirical evidence for our argument that a further shifting of the CO 2 emissions embodied in exports from the less developed regions of China to the world in the near future is impending. Given the uncertainties imposed by China's strict COVID-19 border control, further supply chain shifts from China to the rest of the world will be a very likely and imminent event. 51 With the world MRIO table and emission inventory of the EXIOBASE database 34 and the calculation by He and Hertwich, 52 Figure 6 is produced to show how CO 2 emissions embodied in trade shifted from 2007 to 2017 across the world. To ensure the discrepancies between different data sources are minimized, we have normalized the global emissions calculated from EXIOBASE with the domestic CO 2 emissions of China calculated in this study. In general, the CO 2 emissions embodied in China's net exports to the world decreased for all regions, which is in line with the findings of other studies. However, North America's (a typical developed region) CO 2 emissions embodied in its net imports show an increase from the world other than China from 2012 to 2017, while the net exports of embodied CO 2 emissions from emerging economies also show an increase from 2012 to 2017.
Fortunately, the rapid development and deployment of clean technologies that were not available a decade ago may help developing countries achieve a clean and green reception of supply chains from China. In recent years, the cost of renewable energies has drastically decreased. 53 Knowledge of the best practices for sustainable investment in energy infrastructures is becoming more available and is regarded as a larger priority by global policy makers. 54 Recent evidence also shows that the exchange of clean energy technologies among countries may be able to put a stop to pollution outsourcing. 55 In other words, having a variety of green technology choices provides us with an alternative future to the past of perpetual emission outsourcing. It could be the key for us to achieve an equally sustainable future for all countries, regardless of the relative levels of economic development and the overall levels of economic well-being.

■ ASSOCIATED CONTENT Data Availability Statement
For the CO 2 emission inventories, we adopted the CEADs database. 30 The CEADs database (https://www.ceads.net/) is a widely utilized database for CO 2 emissions in China. It follows IPCC Guidelines for National Greenhouse Gas Inventories when compiling its emission inventories. 31 It gives a breakdown of CO 2 emissions across Chinese provinces and sectors. We mapped the CEADs emission inventory in  Table S5 in Supporting Information for data result.

Environmental Science & Technology pubs.acs.org/est
Policy Analysis accordance with our MRIO table using a method applied by previous studies. 32,33 Our MRIO table is compiled from the regional Input−Output tables published by the Bureau of Statistics of the respective provinces. Global flow of embodied CO 2 emissions are calculated using data of EXIOBASE database. 34